From SCDigest's On-Target e-Magazine
March 28, 2012
Supply Chain News: What is the Future for Outsourced Procurement?
Hackett Group Survey Shows Modest Increase Expected for Outsoucing - but More Aggressive Plans for Offshoring
SDigest Editorial Staff
Not long ago, the notion of "procurement process outsourcing" seemed to be quite the rage, with a large number of service organizations offering outsourced management of the procurement function.
That might have led many procurement professional to be worried about their employement futures, though we will note such moves almost always involved indirect procurement areas, not direct goods and materials.
So where do we stand today?
A recent research effort by the consultants at the Hackett Group shows a sort of mixed bag: not a whole lot of real procurement outsourcing yet, but more aggressive plans for the future by many companies.
The chart below shows the result from a Hackett survey question relativeto a company's current level of outsourcing today, as well as plans for the next 2-3 years.
Current Levels and Future Plans for Procurement Process Outsourcing
Source: Key Issues Study - The Hackett Group, 2012
As can be seen, 60% of companies say they still manage internally 90% or more of procurement activity, and another 23% say they manage 60-90% currently. Very few have even a 50-50 split between insourced and outsourced management.
However, the expectations are that this will change a bit over the next 2-3 years. The percentage predicitng their level of inhouse management will remain at 90% or more drops from 60% to 48%, with most expecting moderate change, as the 60-90% inhouse number goes up from 23% to 31%, accounting for most of the 90%+ delta.
(Sourcing and Procurement Article Continues Below) |